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Angry protests rocked cities across Jordan overnight against IMF-backed austerity measures including a new income tax draft law and price hikes, hours after the government and unions failed to reach an agreement to end the standoff.

Some 3,000 people faced down a heavy security presence to gather near the prime minister's office in Amman until the early hours of Saturday morning, waving Jordanian flags and signs reading "we will not kneel".

Protests have gripped the country since Wednesday, when hundreds responding to a call by trade unions, flooded the streets of Amman and other cities to demand the fall of the government.

Last month, the government proposed an income tax draft law, yet to be approved by parliament, aimed at raising taxes on employees by at least 5 percent and on companies by between 20 and 40 percent.

The measures are the latest in a series of economic reforms since Amman secured a $723-million three-year credit line from the International Monetary Fund in 2016.

Protests have gripped the country since Wednesday, when hundreds responding to a call by trade unions, flooded the streets of Amman and other cities to demand the fall of the government

Since January, Jordan - which suffers high unemployment and has few natural resources - has seen repeated price rises including on staples such as bread, as well as extra taxes on basic goods.

The price of fuel has risen on five occasions since the beginning of the year, while electricity bills have shot up 55 percent since February.

The IMF-backed measures have sparked some of the biggest economic protests in five years.

Bank employee Mohammad Shalabiya, 28, said demonstrators wanted "to tell the government that the citizen's income isn't suitable for this kind of law and that we have a right to demonstrate".

Lina Rsheidat, 35, a housewife with a red keffiyeh scarf around her neck, said the proposed law was "unjust" and would "harm the Jordanian people".

According to official estimates, 18.5 percent of the population is unemployed, while 20 percent are on the brink of poverty.

The Economist Intelligence Unit earlier this year ranked Jordan's capital as one of the most expensive in the Arab world.

Struggling economy

Jordan, a key US ally, has largely avoided the unrest witnessed by other countries in the region since the Arab Spring revolts broke out in 2011, although protests did flare late that year after the government cut fuel subsidies.

But the country has long played host to refugees from neighbouring Iraq, and according to government figures, over one million people have fled to Jordan from Syria's devastating seven year war, exacerbating its struggling economy.

Amman has repeatedly urged international donors to provide extra funds to help it host them.

On Saturday Mulki met with trade union representatives who demanded the income tax law be revoked, but they failed to reach an agreement.

The head of Jordan's federation of unions, Ali Obus, demanded that the state "maintain its independence and not bow to IMF demands".

King Abdullah II called on parliament to lead a "comprehensive and reasonable national dialogue" on the new tax law.

"It would not be fair that the citizen alone bears the burden of financial reforms," he told officials on Saturday.

The IMF says the loan aims at slashing Jordan's public debt from about 94 percent of GDP to 77 percent by 2021, through "reforms to bolster economic growth and gradual fiscal consolidation", according to its website.

A majority of 78 out of parliament's 130 representatives are opposed to the income tax law.

The speaker of Jordan's senate called a consultative meeting for Sunday.

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